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Here in FL, there is no state income tax but we do have a higher rate of property taxes. I have considered moving to Tennessee. One of the reasons was due to their lack of income taxes like FL. The negative side of TN is the state has the highest sales tax in the country and it doesn't exclude groceries.
I am also looking to go to one of the Carolinas but they both have state income tax. However their rates of sales taxes are lower. NC has a flat income tax rate of either 5.49 or 5.75, (seen figures for both, not sure which it is exactly) with a sales tax of close to 7 percent. SC has a state income tax of 7 percent and sales taxes apparently range from 6-9%. It also appears Georgia recently lowered their state income rate down to under 6% recently. As for groceries, I think Nc has a 2 percent tax on groceries but SC exempts groceries.
I've read articles saying that states without state income tax have greater income inequality. Not sure how true that is though.
So which place would be better financially for a lower or middle class family?
Really depends on your situation. I live in Washington state which has no state income tax, high taxes on gas, alcohol, marijuana and mid level property taxes. If you are high income, it's fantastic but if you are on the low income scale, not great because the tax system is regressive and favor high income people. So you have a situation where low income people are paying a much high overall tax rate than high income people.
Oregon just below us has no sales tax, high income tax and medium to high property taxes. For lower middle class, this is a favorable arrangement but is not favorable for high income.
After moving from Oregon to Washington to add to much higher wages, I had no state income tax so the upgrade was massive. Since I'll soon retire, I would consider moving back to Oregon with a reduced income.
So in your situation, probably better in a high income tax state.
Easy. Find someplace on the border between a no/low income tax state and a no/low sales tax state. Live on the low income tax side and shop on the low sales tax side.
Here in FL, there is no state income tax but we do have a higher rate of property taxes. I have considered moving to Tennessee. One of the reasons was due to their lack of income taxes like FL. The negative side of TN is the state has the highest sales tax in the country and it doesn't exclude groceries.
I am also looking to go to one of the Carolinas but they both have state income tax. However their rates of sales taxes are lower. NC has a flat income tax rate of either 5.49 or 5.75, (seen figures for both, not sure which it is exactly) with a sales tax of close to 7 percent. SC has a state income tax of 7 percent and sales taxes apparently range from 6-9%. It also appears Georgia recently lowered their state income rate down to under 6% recently. As for groceries, I think Nc has a 2 percent tax on groceries but SC exempts groceries.
I've read articles saying that states without state income tax have greater income inequality. Not sure how true that is though.
So which place would be better financially for a lower or middle class family?
Rule of thumb:
If you are lower class, minimize your sales tax.
If you are middle class, minimize your property tax.
If you are upper class, minimize your income tax.
Easy. Find someplace on the border between a no/low income tax state and a no/low sales tax state. Live on the low income tax side and shop on the low sales tax side.
A lot of people do this by living in Vancouver, Washington and buying in Portlandia.
If you are lower class, minimize your sales tax.
If you are middle class, minimize your property tax.
If you are upper class, minimize your income tax.
I don't know if I agree with this. At least for the lower class part of it. If you're lower class, you probably are not spending enough on things where the savings from sales tax will amount to anything meaningful. Lower class is probably still better off in a no state income tax state.
I don't know if I agree with this. At least for the lower class part of it. If you're lower class, you probably are not spending enough on things where the savings from sales tax will amount to anything meaningful. Lower class is probably still better off in a no state income tax state.
It depends on how the state taxes you. In some states you're taxed on the first dollar you make, in others there's a threshold below which you pay no income tax.
It depends on your income, what is and is not taxed, and what you buy. In general I would think the income tax is most important. I would also be surprised if moving from Fl to place you though had lower taxes would be cost efficient due to the cost of relocating.
I don't know if I agree with this. At least for the lower class part of it. If you're lower class, you probably are not spending enough on things where the savings from sales tax will amount to anything meaningful. Lower class is probably still better off in a no state income tax state.
The lower classes basically have to spend everything that comes in to subsist.
It is best to live in a climate you like, that's why I live in SoCal. Even with all it's problems, and there are many, I'm a native here, and have no plans to move, not yet, anyway.
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